Intuitive Surgical Insurance for da Vinci Robot Lawsuits Challenged

An insurance company for Intuitive Surgical is seeking to avoid coverage for da Vinci robotic surgery lawsuits, alleging that the manufacturer of the controversial surgical robot failed to adequately disclose the scope of claims being pursued by patients who suffered injuries following surgery.

On October 21, Illinois Union Insurance Company filed a complaint (PDF) for rescission of an insurance policy and declaratory relief in the U.S. District Court for the Northern District of California.

The insurer claims that when it was agreed to provide coverage for Intuitive Surgical, the makers of the da Vinci robot failed to notify them that it had entered into tolling agreements with several potential plaintiffs who were planning to file product liability lawsuits over complications following da Vinci robotic surgery.

The da Vinci lawsuit tolling agreements provided plaintiffs additional time to file suit, delaying the expiration of potential statutes of limitations in exchange for an agreement that if any lawsuit is filed it will be brought in agreed upon courts. Intuitive Surgical disclosed the tolling agreements in a filing with the U.S. Securities and Exchange Commission (SEC) in April 2013.

According to the lawsuit brought by Illinois Union Insurance Company, Intuitive Surgical entered into the tolling agreement deal in November 2012, but did not inform its brokers when it purchased coverage in January 2013. The complaint also claims that the medical device manufacturer still does not know how many tolling agreements were entered into at the time, and thus has no idea how many potential product liability lawsuits may be filed over the da Vinci robot; information the insurer claims it should have been provided when Intuitive Surgical sought coverage.

“The existence of the tolling agreements and the increasing number of claimants added to the tolling agreements were facts that would have been material to Plaintiff’s underwriting process that led to the binding of coverage and issuance of the Policy,” the complaint claims. “Had Plaintiff been informed of the tolling agreements and the increasing number of claimants during the application process, Plaintiff would not have proceeded with the application process and would have withdrawn any quote for the Policy provided to the Broker, and the Policy would never have been issued to Defendant.”

The lawsuit seeks to rescind the company’s insurance coverage for Intuitive Surgical, which provides primary and excess insurance options for $15 million per occurrence and aggregate up to $50 million. The insurer also wants the court to declare that it is not responsible to cover any of Intuitive Surgical’s legal defense costs linked to claims affected by the tolling agreement since it was hired to cover the company.

Da Vinci Robot Problems

The da Vinci Surgical System is a complex robot that has been heavily marketed and increasingly used in recent years for a number of surgical procedures to provide a less invasive surgery, which reduces recovery time. The device is controlled by a surgeon looking at a virtual reality representation of the patient’s internal organs and manipulating its four metal arms with hand and foot controls.

Since it was introduced in 2000, use of the da Vinci robot-assisted surgical system has increased dramatically throughout the United States amid aggressive marketing and promotions by Intuitive Surgical. However, concerns have also emerged about the risk internal injuries and death, leading the FDA to launch a probe earlier this year into the safety of the da Vinci surgical robot.

According to the insurance lawsuit, Intuitive Surgical has installed 2,585 da Vinci robots worldwide, with 1,878 in the U.S. The company estimates that surgeons have performed more than 450,000 surgeries with the da Vinci robot since 2012 alone.

Over the first eight months of 2013, more than 2,332 complaints involving da Vinci robotic surgery were reported to the FDA’s MAUDE (Manufacturer and User Facility Device Experience) database. This compares with 4,603 reports received for the 12 year period between 2000 and 2012. Reports include cases of bowel perforations, serious injuries and deaths, with many of the cases appearing to be years old and only surfacing now because of the ongoing product liability lawsuits brought against Intuitive Surgical.

In August, Intuitive Surgical disclosed that at least 33 complaints have already been filed in state and federal courts throughout the country, and reports suggest that hundreds of additional cases may be brought in the coming months and years.

Intuitive Surgical also faces a number of shareholder class action lawsuits over the da Vinci, which were brought on behalf of investors who allege that the company has withheld information about the safety of the robotic surgery system and minimized reports of serious complications experienced by surgeons during or shortly after the procedures.